Suburban Chicago Agent: There Won’t Be Any “Steals”
There is an interesting interview in the Daily Herald called “Realtor Sees No Doom and Gloom” with Andy Starck who is “chief executive officer of Palatine-based Starck Realtors and has been in the industry in the suburbs almost 40 years.”
This is what he says about the Chicago area real estate market:
- Home prices might have dropped a little, but not precipitously.
- Anyone who buys a home now has little chance of suffering a loss.
- Sellers are becoming realistic and are dropping their asking prices.
- Buyers are not going to “steal” homes.
- Mortgages are available.
Some other interesting quotes:
Sellers are not going to take crazy offers, he said.
Starck has seen offers $250,000 below the asking price on a $500,000 home.
“It’s just not going to happen,” he said. “Sellers are not desperate. They are reasonable and want to sell their homes and move on to the next ones.”
And this is why Chicago is “different” than the coasts, which saw a bubble:
Starck offers all the usual reasons: The economy is broad based and expanding, Chicago is a transportation hub and there isn’t enough housing for the continuing demand.
“It is not that Chicago is bulletproof, but we do have an overall lack of housing stock over time, and our economy is diverse and pretty healthy overall,” Starck said.
Phew, that’s a relief, I feel better already.
John
“(Sam Zell is one of the top names in real estate over the last few years. Here are some observations he gave to Reuters this past week.
The risk of a housing bubble in the U.S. market is highly localized as supply is still catching up with demand in most of the country, U.S. real estate magnate Sam Zell said on Thursday.
“There will be a softer real estate market in some areas as a result, but I keep telling people there is no bubble,” Zell told Reuters after an economic conference in Chicago where his headquarters is located.
“The fact remains that even with the gains of the past five years, American residential real estate prices in relative terms are among the cheapest in the world,” he said.
“Chicago is a transportation hub and there isn’t enough housing for the continuing demand”
Apparently this guy hasn’t seen the census data that shows the Chicago metro area population actually trending down slightly.
“The fact remains that even with the gains of the past five years, American residential real estate prices in relative terms are among the cheapest in the world,”
Zell is correct about that but do we want America to become like the rest of the world where only the upper class or in some cases the elite can afford to own? Statements like that show how out of touch MR. Zell has become with the average American. I like to see him try to live on a median income for a year and see if he changes his tune.
Prices are still out of whack with incomes in many of the metropolitan areas- as you point out Chicago Bubble Blog. The average home price in DuPage County is over $300,000- which is unaffordable for the average income families.
And there is simply too much inventory. We have to get rid of the glut of inventory before prices can go higher and that will take quite awhile.
Yeah- Zell is out of touch in some respects although I respect his real estate experience.
Actions speak MUCH louder than words.
Didn’t Sam Zell sell all of his US real estate this past year, and has decided to invest in real estate overseas? Maybe he sees a potential benefit in pumping up US real estate further in order to insure an even bigger crash in the future? Afterall, that is the “Grave Dancer’s” blueprint for success, isn’t it?
I highly doubt that his words are for anyone’s benefit but his own.
Zell sold his commercial real estate portfolio and put the money into “buying” the Tribune Company. It was a perfectly timed sell yet it remains to be seen whether the Tribune Company deal will be as good. It probably will…
Zell still has Equity Residential – a large collection of residential rental properties. If he sells Equity Residential, it is probably going to be one of the first signs that the residential real estate market is worth investing in.
The fact that Zell isn’t selling should be a guide to interpreting his statements.
Thanks for the correction, Tipster. I don’t know why I was confused about that. However, he is buying foreign real estate. I have heard about him emphasizing purchases in developing countries (Brazil and Mexico, e.g.)
Did you mean to say that if he sells Equity Residential it is a sign that “residential real estate market is worth investing in?” If someone believes in Zell, I would assume the opposite would be true.
Also, I don’t kow if it is a “fact” that Zell isn’t selling. It was reported that in 2006 Equity Res sold 335 properties and 39,608 units (and 1,069 condominium units), while purchasing only 35 properties and 8,768 units. This left Equity Res owning all or a portion of 617 properties consisting of 165,716 units as of 12/31/06. I understand this to mean a reduction of 300 properties in 2006 alone, or nearly 1/3 of properties held at the beginning of that year.
I don’t have any numbers for 2007 but it sure looks like he has sold many properties since the bubble peak. Maybe his words are due to a lack of buyers for more of them?